The structural, vibrational and electronic properties of small clusters of indium oxide (InmOn; m; n = 1, 2) in the neutral and the ionic state are studied using first-principles method based on density functional theory. The linear structures are preferred over all the other possible structures for the neutral InO clusters. The structural deformations and the instability in InO, In2O; InO2 and In2O2 are relatively higher when an electron is removed than the case when an electron is added to it. In2O, with negative electron affinity, is predicted to be highly unstable. The calculated results suggest that the neutral InO clusters are likely to become unstable when the metal to oxygen ratio is larger than unity.